Background

President Trump is reimposing an additional 10 percent tariff on non-alloyed unwrought aluminum articles from Canada, effective for subject goods entered or withdrawn from warehouse for consumption on or after 12:01 am EDT on Aug. 16. Canada has responded with plans to retaliate against $2.7 billion worth of imports from the U.S.

Affected companies can petition for an exclusion from this tariff. For more information on the products covered by the new tariff and whether and how to request an exclusion, please contact Kristen Smith or Nicole Bivens Collinson.

The U.S. imposed a section 232 tariff on aluminum products from Canada in June 2018, following which Ottawa levied retaliatory tariffs on goods from the U.S. Both sides lifted their tariffs in May 2019 after they agreed on a range of measures expected to allow imports of aluminum from Canada to remain stable at historical levels without meaningful increases.

The Department of Commerce recently advised the president that imports of non-alloyed unwrought aluminum from Canada surged 87 percent in the 12 months after the tariff was lifted. A statement from the Office of the U.S. Trade Representative asserted that this surge has intensified in recent months despite a contraction in U.S. demand. As a result, despite acknowledging that the increase in imports from Canada “coincides with a decrease in imports of these articles from other countries,” the president determined that the measures previously agreed with Canada have not been effective and that the surge in imports from Canada “threatens to harm domestic aluminum production and capacity utilization.”

However, the resulting decision to reinstate the tariff is drawing broad opposition. A CTV article quoted Aluminum Association President Tom Dobbins as saying “the vast majority of [U.S.] aluminum companies and users” did not want the tariff, which a Bloomberg article quoted the Canadian Chamber of Commerce as saying will “only exacerbate disruptions to North American supply chains” as they try to adjust to new requirements under the U.S.-Mexico-Canada Agreement and recover from the COVID-19 pandemic-induced economic downturn. That article also quoted Beer Institute President and CEO Jim McGreevy as saying the tariffs “aren’t bringing back aluminum jobs, they’re creating higher costs for end users and that’s not really good for anyone.” A trade group representing automobile manufacturers, parts suppliers, and others added that Section 232 tariffs should be reserved “for true national security threats” and “should not be used in trade disputes between allies.”

The Canadian government said it would respond by imposing a 10 percent surtax on aluminum and aluminum-containing products from the U.S. Affected goods will be drawn from a list (see attached) that includes aluminum bars, wire, plates, foil, and tubes as well as products such as aerosol containers, beverage cans, cables, kitchen and household articles, nails, tacks, screws, bolts, wire fencing, refrigerators, washing machines, bicycles, bike wheels and parts, golf clubs, and sporting goods.

This tariff will be imposed beginning Sept. 16 and will remain in effect until the U.S. tariff is eliminated. It will not apply to U.S. goods that are in transit to Canada on Sept. 16. Comments on the products to be subject to this retaliatory tariff are due by Sept. 6.

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Professional

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Marilyn-Joy Cerny
Member
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J. Nicole Bivens Collinson
President, International Trade & Government Relations
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Kristen S. Smith
Member, Trade Remedies Practice Group Leader

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